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Ml MILK
CHECK
'Wr 1 THOMAS JURCHAK
■ 4 Dairy Specialist
I • 1 Lackawanna County
SCRANTON (Lackawanna Co.) After
the five fall in cheese prices reported here last
month when the block price fell 18 cents in 11
weeks, they were hitting the ground shortly
thereafter.
However, when they hit they bounced
higher and faster than anyone can remember.
In three weeks from August 27 to Sept 10
they recovered 14 of the 18 cents they lost in
the previous 11 weeks. Barrel prices jumped
13 cents in one week for something of a record
in recent history.
Cheese prices were expected to increase
this fall but no one expected so much so soon.
Storage stocks for July were still higher
than a year ago with cheddar up 6 percent and
American up 9 percent July’s national milk
production Was up 1 percent over last year,
but Wisconsin’s production has been down 2
percent since June.
In addition, fluid milk shipments from Wis
consin to Southern markets are picking up
seasonally now with 43 loads moving in that
direction the first week of September.
Nothing has happened to change the milk
powder markets and even subsidized export
sales under the Dairy Export Incentive Prog
ram have been little help.
Double Dip
As part of the 18-cent drop in cheese prices
the Minnesota-Wisconsin Price Series fell
another 25 cents to $11.17 in August nearly
matching the low for the year (so far) of
$11.02 in March.
Usually you have only one low price in the
M-W per year but this time you’ll have two.
After falling for three months from January to
March the M-W price rose to its peak (so far)
of $12.52 in May and now has fallen again to
$11.17 in August.
So, in addition to having a double dip on the
low side you may end up with twin peaks on
the high side all in one year.
That was a drop of $1.35 in the M-W since
May but the 14-cent increase in the cheese
price could translate into a $1.40 increase in
the M-W putting it back where it was in May.
How Come
Reasons for the volatility in cheese prices
are now mainly speculative, which means
your reasons are as good as anybody’s but for
an industry that has been used to stable prices
in the past this may be a sign of things to
come.
When milk and dairy product prices were
supported by government they didn’t change
very much. Dealers of dairy products didn’t
have to worry about supplies because the gov
ernment usually had some to sell and would
pay the storage costs.
Now handlers have to guess what future
supplies will be for their products and gamble
on prices.
The uncertainty of how milk production
will be affected by forage supplies and feed
prices is an important part of the gamble. Per
haps they overreacted this time, but it’s a new
ball game for them as well as the producer.
What Next
Because the cheese price increases came
early in September, they will help to increase
the M-W price this month especially if they
stay up. If they don’t, you may have to look
hard for changes on your milk checks.
At best, however, even if the M-W starts up
this month, it will be Thanksgiving before you
see the money. Christmas will look a lot
better.
The blend prices to producers for August
dropped S 2 cents in Order 2; 60 cents in Order
36 and the weighted average in Order 4 was
down 99 cents below your July prices. It will
take a few months to turn the losses of the last
two months into plusses on your checks, but
cheese prices can do it if they just stay put
where processors and producers can plan
ahead.
Hall Leads
UNIVERSITY PARK (Centre
Co.) A faculty member in Penn'
Slate’s College of Agricultural
Sciences recently led 29 high
school students on a tour of Eur
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of national FFA agricultural profi
ciency awards.
Dr. David Hall, assistant pro
fessor of agricultural and exten
sion education, was an assistant
leader of the European travel
seminar, sponsored by the Nation
al FFA Foundation.
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